Vishal ‘Grinch’ Garg: Indian American CEO Apologizes for the Way He Fired 900 Employees

Just when Indians across the world were celebrating Paras Agrawal’s appointment as Twitter CEO, another Indian American executive has been making headlines, but for all the wrong reasons. Vishal Garg, 43, of mortgage lender startup, Better.com, fired 900 employees on a Zoom call last week, just before the Christmas holidays. In a video, which has now gone viral, the Indian American is heard telling his employees right at the onset that he comes to them with “not great news.” He continued: “If you’re on this call, you are part of the unlucky group being laid off,” adding that their “employment here is terminated effective immediately.” 

Garg said changes in the market, “efficiency” and “productivity” were the reasons behind the mass termination. “The market has changed … we have to move with it in order to survive,” he said in the mass Zoom call. He told the employees that letting them go was “ultimately” his decision and he wanted them to hear it from him. Confessing that he didn’t want to do this, Garg said during the call that the last time he fired employees he cried. “This time I hope to be stronger.”

Almost a week later, after facing severe backlash, Garg apologized “for the way he handled the layoffs.” In a letter he sent to his employees, posted on the company’s website, he wrote: “I own the decision to do the layoffs, but in communicating it I blundered the execution. In doing so, I embarrassed you.” Adding that the way he “communicated this news made a difficult situation worse,” he said he is “committed to learning from this situation and doing more to be the leader that you expect me to be.”

Garg founded Better.com in 2016. It is backed by Japanese conglomerate Softbank, among others, and “received a $750 million cash infusion from investors last week and was recently valued at around $7 billion,” according to a Forbes report. 

Garg founded Better.com in 2016. It is backed by Japanese conglomerate Softbank, among others, and “received a $750 million cash infusion from investors last week and was recently valued at around $7 billion.”

The Forbes report noted that during the pandemic, the company “ballooned in size as the housing market went into overdrive.” And despite the layoffs, it still has “more than 9,000 employees across the U.S., India, and the U.K,” the report said. The report also quoted Garg saying that the company’s “board and investors have been totally supportive about the layoffs and how they were handled.” The company is expecting to go public via a SPAC deal before the end of the year, the report

Better.com CFO Kevin Ryan confirmed that the company laid off 9 percent of its employees after the call. “Having to conduct layoffs is gut-wrenching, especially this time of year; however, a fortress balance sheet and a reduced and focused workforce together set us up to play offense going into a radically evolving homeownership market,” Ryan said in a statement to Forbes.

One of the employees who was laid off on that call told The Daily Beast that the call lasted “three minutes tops.” Another employee told the news outlet that the company “dumped us like trash,” while another one said they worked “since the beginning and worked hard for the company and for our roles.” 

A day after the mass termination, Garg reportedly vented out on a professional network Blind. Garg confirmed to Fortune that he wrote under the username “uneducated,” and informed his employees that “at least 250 of the people terminated were working an average of two hours a day while clocking in 8 hours+ a day in the payroll system. They were stealing from you and stealing from our customers who pay the bills that pay our bills. Get educated.” He further told the magazine that while he stood by his comments, he thinks “they could have been phrased differently, but honestly the sentiment is there.”

While he expressed regret about the layoffs and said he would have liked to retrain everyone for other roles, Garg emphasized that it’s a difficult time in the mortgage industry and that it’s overstaffed. The number of mortgage applications is falling as interest rates slowly rise.

Four weeks ago, Garg told Fortune that he and his management team started reviewing individual employee productivity data. “As we started to slow down our pace of hiring, we saw some alarming statistics and a number of our customers were not getting the service that they deserved from our teammates,” he told Fortune. “The data factored into who the company decided to lay off.”

Meanwhile, Garg’s actions have prompted resignations from three senior communications representatives at the company. Business Insider reported on Dec. 7 that marketing head Melanie Hahn, Public relations head Tanya Hayre Gillogley, and communications VP Patrick Lenihan have stepped down.

Two current employees and an ex-staffer told Fortune magazine that Garg is “known to be erratic on Better.com’s internal Slack messaging system and in company meetings.” The Daily Beast reported this August about lawsuits involving Garg which alleged that he or his companies “may have misappropriated tens of millions of dollars from prior businesses; that his companies engaged in fraud; and that he used ill-gotten money and stolen technology to found Better in the first place.” A former employee told The Daily Beast at the time that “Vishal is obsessed with alleged previous aggressive comments.

Garg is also the founding partner of 1/0 Capital, a credit and financial technology incubator where he has been a member of the founding team. He also served as chairman of Climb Credit, The Number, and Phoenix Holdings. Previously, he was co-head and Managing Partner, ARAM ABS Group and the founder and president and CFO of MyRichUncle, which he founded at the age of 21 and built into the fourth largest private student loan originator in the U.S.. Prior to MyRichUncle, Garg was an analyst in the Mergers & Acquisition department at Morgan Stanley, a frontier emerging markets portfolio manager for the Strategies Fund. He is a graduate of Stuyvesant High School in New York and a Dean’s Scholar at NYU Stern where he graduated with the highest honors.